Health proposal questions

By The Arkansas Democrat-Gazette

Posted: August 9, 2009 at 6 a.m.

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In detail

Congress is pursuing three plans in response to President Barack Obama's call for health-care change.

A House of Representatives' bill incorporates proposals by three committees - Energy and Commerce, Education and Labor, and Ways and Means - and has gotten the most publicity. The bill - H.R. 3200, the Affordable Health Choices Act of 2009 - is largely the product of the chamber's Democratic Party majority.

The Senate Health, Education, Labor and Pensions Committee approved its plan, also called the Affordable Health Choices Act, on July 15. It, too, is largely a Democratic creation.

The Senate Finance Committee, which has jurisdiction over tax matters, likely will have the most influential voice. In a bid for bipartisanship, six members - three Democrats and three Republicans - have been negotiating in secret. They have released a series of papers laying out options but have not released a draft of a bill.

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OVERALL APPROACH

Senate Finance Committee

* Require all individuals to have health insurance.

* Create a Health Insurance Exchange through which individuals and small businesses can purchase health coverage, with subsidies available to individuals and families with incomes between 100 percent and 400 percent of the federal poverty level, currently $10,830 for an individual or $22,050 for a family of four.

* Impose new regulations on the individual and small-group insurance markets.

* Expand Medicaid and the Children's Health Insurance Program and offer a temporary Medicare buy-in for the pre-Medicare population.

Senate Health, Education, Labor and Pensions Committee

* Require all individuals to have health insurance.

* Create state-based American Health Benefit Gateways through which individuals and small businesses can purchase health coverage, with subsidies available to individuals and families with incomes up to 400 percent of the federal poverty level, currently $10,830 for an individual or $22,050 for a family of four.

* Require employers to provide coverage to their employees or to pay an annual fee, with exceptions for small employers, and provide certain small employers credits to offset the costs of providing coverage.

* Impose new regulations on the individual and small-group insurance markets.

* Expand Medicaid to those with incomes up to 150 percent of the federal poverty level.

House of Representatives

* Require all individuals to have health insurance.

* Create a Health Insurance Exchange through which individuals and smaller employers can purchase health coverage, with premium and cost-sharing credits available to individuals and families up to 400 percent of the federal poverty level, currently $10,830 for an individual or $22,050 for a family of four.

* Require employers to provide coverage to employees or pay into a Health Insurance Exchange Trust Fund, with exceptions for certain small employers.

* Impose new regulations on plans participating in the exchange and in the small-group insurance market.

* Expand Medicaid to those with incomes up to 133 percent of the federal poverty level.

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REQUIREMENTS FOR INDIVIDUALS

Senate Finance Committee

* Require all individuals to have insurance that meets minimum coverage standards, enforced through an excise tax equal to a percentage of the premium for the lowest-cost option available through the Health Insurance Exchange in the area where the individual resides. Exemptions to be granted in cases of financial hardship.

Senate Health, Education, Labor and Pensions Committee

* Require individuals to have qualifying health coverage, enforced through a minimum tax penalty of no more than $750 per year. Exemptions to be granted to residents of states that do not establish an American Health Benefit Gateway, members of Indian tribes, those for whom affordable coverage is not available and those without coverage for fewer than 90 days.

House of Representatives

* Require all individuals to have "acceptable health coverage" enforced through a penalty of 2.5 percent of modified adjusted gross income up to the cost of the average national premium for individual or family coverage under a basic plan in the Health Insurance Exchange. Exceptions to be granted for dependents, religious objections and financial hardship.

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REQUIREMENTS FOR EMPLOYERS

Senate Finance Committee

* Proposed option A: Require employers with more than $500,000 in annual payroll to offer coverage to their employees and contribute at least 50 percent of the premium or pay an assessment.

* Proposed option B: No such employer "pay or play" requirement.

Senate Health, Education, Labor and Pensions Committee

* Require employers with more than 25 employees to offer coverage to their employees and contribute at least 60 percent of the premium or pay $750 for each uninsured full-time employee and $375 for each uninsured part-time employee who is not offered coverage.

House of Representatives

* Require employers with more than $400,000 in annual payroll to offer coverage to their employees and contribute at least 72.5 percent of the premium for single coverage and 65 percent of the premium for family coverage or pay 8 percent of their payroll into the Health Insurance Exchange Trust Fund. (Energy and Labor Committee amendments would exempt employers who would be negatively affected by job losses as a result of the requirement and would extend the annual payroll exemption to $750,000.)

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EXPANSION OF PUBLIC PROGRAMS

Senate Finance Committee

* Public plan option A: Offer coverage through the Health Insurance Exchange that will be subject to the same rating and risk-adjustment rules as private plans, to be administered by the federal government, by multiple third-party administrators or by the states.

* Public plan option B: Do not create such a plan.

* Medicare: Until the Health Insurance Exchange is under way, allow individuals ages 55-64 without coverage to buy into Medicare at full cost. Phase out or reduce the two-year waiting period for people with disabilities.

* Medicaid: Expand eligibility to individuals with incomes up to 115 percent of the federal poverty level; possibly increase eligibility for parents, pregnant women and children.

* Children's Health Insurance Program: After Sept. 30, 2013, expand eligibility to individuals with incomes up to 275 percent of the federal poverty level.

Senate Health, Education, Labor and Pensions Committee

* Medicaid: Expand eligibility to individuals with incomes up to 150 percent of the federal poverty level.

* Children's Health Insurance Program: Grant individuals eligible for the program the option of enrolling in it or in an American Health Benefit Gateway.

House of Representatives

* Medicaid: Expand eligibility to individuals with incomes up to 133 percent of the federal poverty level. Provide coverage to newborns who lack acceptable coverage and optional coverage to low-income HIV-infected individuals and for family-planning services to certain low-income women. In addition, increase Medicaid payment rates for primary-care providers to 100 percent of Medicare rates. (An Energy and Labor Committee amendment would require states to finance 10 percent of the program's expansion beginning in 2015.)

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CREATION OF INSURANCE POOLS

Senate Finance Committee

* Create one national or multiple regional Health Insurance Exchange(s) through which individuals and small employers can purchase coverage. Require all state-licensed insurers in the individual and small-group markets to participate. Require companies to issue, renew and allow rating variation based only on age, tobacco use, family composition and geography - not health status.

* Require the exchange(s) to develop a standardized format for presenting insurance options, create a Web portal to help consumers find insurance, maintain a call center for customer service, and establish procedures for enrolling individuals and businesses and for determining eligibility for tax credits.

Senate Health, Education, Labor and Pensions Committee

* Create state-based American Health Benefit Gateways, administered by a governmental agency or nonprofit organization, through which individuals and small employers can purchase qualified insurance. Restrict access to coverage through the gateways to individuals who are not incarcerated and who are not eligible for employer-sponsored coverage that meets minimum qualifying criteria and affordability standards, or to Medicare, Medicaid, TRICARE or the Federal Employee Health Benefits Program.

House of Representatives

* Create a National Health Insurance Exchange, through which individuals and employers can purchase qualified insurance, including from private health plans and the public health-insurance option. Restrict access to coverage through the exchange to individuals who are not enrolled in qualified or grandfathered employer or individual coverage or in Medicare, Medicaid, TRICARE or Veterans Affairs. (An Energy and Labor Committee amendment would permit members of the armed forces and those with TRICARE or VA coverage to enroll in a plan offered through the exchange.)

* Create a public option to be offered through the Health Insurance Exchange that meets the same requirements as private plans regarding benefit levels, provider networks, consumer protections and cost-sharing. Require this plan to offer basic, enhanced and premium plans, and permit it to offer premium-plus plans. For the first three years, set provider-payment rates at Medicare rates and allow 5 percent bonus payments to providers who participate in both Medicare and the public plan and to pediatricians and other providers who don't typically participate in Medicare.

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CHANGES TO PRIVATE INSURANCE

Senate Finance Committee

* Require individual and small-group insurers to issue policies in four benefit categories - lowest, low, medium and high - and to issue, renew and allow rating variation based only on age, tobacco use, family composition and geography - not health status. Require all state-licensed insurers to participate in the Health Insurance Exchange.

Senate Health, Education, Labor and Pensions Committee

* Require individual and small-group insurers and those in the American Health Benefit Gateways to meet the same regulations relating to issue, premium rating and prohibitions on pre-existing-condition exclusions. Permit state-regulated licensed insurers to sell policies outside of the gateway.

* Require insurers to provide financial incentives to providers to better coordinate care through case management and chronic-disease management, promote wellness and health improvement activities, improve patient safety and reduce medical errors. Provide dependent coverage for children up to age 26 for all individual and group policies.

House of Representatives

* Require private insurers and those in the Health Insurance Exchange to meet the same regulations relating to issue, premium rating and prohibitions on pre-existing-condition exclusions. Prohibit coverage purchased through the individual market from qualifying as acceptable coverage unless it is grandfathered coverage; individuals can purchase a qualifying plan through the Health Insurance Exchange.

* Create the Health Choices Administration to establish qualifying benefits standards. Improve consumer protections by establishing uniform marketing standards, requiring fair grievance and appeals mechanisms and prohibiting insurers from rescinding coverage except in cases of fraud.

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PREVENTIVE CARE

Senate Finance Committee

* Cover only proven Medicare and Medicaid preventive services and provide incentives to beneficiaries of those programs to complete behavior-modification programs. Provide grants to states to promote integration of health-care services and to provide tax credits to small businesses that implement wellness programs.

Senate Health, Education, Labor and Pensions Committee

* Develop a national prevention and health-promotion strategy to set specific goals and to fund prevention and public-health programs. Award competitive grants to state and local governments and community-based organizations to implement and evaluate activities that reduce chronic disease rates and address health disparities.

* Permit insurers to create incentives for health-promotion and disease-prevention practices. Encourage employers to provide wellness programs in part by increasing the allowable premium discount for employees who participate in such programs from 20 percent to 30 percent.

House of Representatives

* Create task forces to develop, update and disseminate evidenced-based recommendations on the use of clinical and community prevention services.

* Cover only proven Medicare and Medicaid preventive services. Eliminate any cost-sharing for preventive services in Medicare and increase Medicare payments for certain preventive services.

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FINANCING

Senate Finance Committee

* Not specified.

Senate Health, Education, Labor and Pensions Committee

* The Congressional Budget Office estimates that this proposal will cost $615 billion over 10 years. Because the committee does not have jurisdiction over the Medicare and Medicaid programs or any revenue-raising authority, mechanisms for financing this proposal will be developed in conjunction with the Senate Finance Committee.

House of Representatives

* The Congressional Budget Office estimates that this proposal, excluding payments from employers and uninsured individuals, will cost $1.042 trillion over 10 years.

* Approximately half of that will be financed through savings from Medicare and Medicaid, by incorporating improvements in productivity, reducing payments to Medicare Advantage plans, changing drug-rebate provisions, reducing potentially preventable hospital re-admissions and reducing Medicaid payments to hospitals that serve a significantly disproportionate number of low-income patients.

* The remaining costs will be financed through a surcharge imposed on individuals with incomes above $280,000 and families with incomes above $350,000 - up to 5.4 percent for families with modified adjusted gross incomes greater than $1 million.

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TAX CHANGES

Senate Finance Committee

* Under consideration.

Senate Health, Education, Labor and Pensions Committee

* Impose a tax on individuals without qualifying health-care coverage of no more than $750 per year.

House of Representatives

* Impose a tax on individuals without acceptable health-care coverage of 2.5 percent of modified adjusted gross income.

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SOURCES: Kaiser Family Foundation, congressional committees cited, U.S. Department of Health and Human Services

NOTE: A fuller comparison is available from the Kaiser Family Foundation (kff.org/healthreform/sidebyside.cfm). A section-by-section summary of the Senate Health, Education, Labor and Welfare Committee bill is available on that committee's Web site (help.senate.gov). A text of the House bill, introduced July 14, along with numerous supporting documents, is available at the Energy and Commerce Committee's Web site (energycommerce.house.gov) under the flag "An American Solution: Quality Affordable Health Care."

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